The worst thing Gilead ever did was cure Hep-c. Cures are boring, low margin, events. In order to really milk people, you got to innovate in the treatment area of medicine — keep the infirmed hooked on your drugs for life — like a subscription model only way more diabolical. Ever since GILD announced they cured Hep-c, ruining a fantastic industry for big pharma, shares have gone lower.
Now GILD is buying KITE for $180 per share, or $11.9b in cash, in an attempt to get back in the game. NOTE: I sold 30,000 shares of KITE at $59, back in 2015 — because that’s the type of guy I am.
Bam! record highs
KITE is at the forefront of CAR-T (Chimeric antigen receptors), used to fight cancer. Without getting into details that neither of us understand, today’s acquisition is causing other CAR-T stocks to run higher. Mostly, this is nonsense, since large acquisitions like this are rarely repeated by peer members. If the other companies were so damned good GILD would’ve bought them instead of KITE.
Nevertheless, BTIG upgraded JUNO today — thinking JUNO could be next to go.
BTIG Research upgrades JUNO to Neutral from Sell. This morning, Gilead (GILD, Not Rated) announced that it would acquire KITE (KITE, Buy, $138 PT) for $180 per share. Gilead’s entrance into the CAR T space now marks the third large biopharma company to take a significant stake within the next generation cell therapy field. As a result of the arms-length transaction, valuations across the CAR T space will benefit due to a scarcity effect for the remaining players. Firm continues to be skeptical of JUNO’s current competitive positioning, but upgrade our rating to Neutral from Sell, as there is not a near term catalyst to offset the positive tailwind for the entire CAR T space.
Here are others in the field that are ripping higher. This list was procured using Exodus, with the keyword search “antigen.”
NTLA, JUNO, BLCM, CLLS, ADAP, IMMU, BLUE, PGNX, ZIOP, FATE, CLDX.
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